Emergencies Rule & More

This article is a continuation of “Emergencies Rule” from our February newsletter which was mailed on February 21, 2012. Reading “Emergencies Rule” establishes a foundation for understanding the examples in this article. If you did not receive a copy of our February newsletter please contact us at ibopindy@aol.com. The article outlines just how the Indiana Horse Racing Commission (IHRC) avoids the checks and balances of other regulatory bodies in Indiana by establishing all of their administrative rules as emergency rules. We had so much to say about this subject that we ran out of space in the newsletter.

In the newsletter article, we reference five pages from the official transcript of the January 24, 2012 IHRC meeting. The scenario involved is an objection from the Indiana HBPA attorney on the IHRC's use of an emergency rule that would reduce simulcast revenues and breed development funds to thoroughbreds and standardbreds in favor of the quarter horses. The article "Emergencies Rule" is not about the specifics of the reallocation of revenues, but is more about the IHRC‘s rulemaking process. The conversation that followed the HBPA's objection to an emergency rule illustrates just how little our commissioners know about their own agency's rulemaking. Every Indiana legislator should read pages 106 through 110 from the transcript which can be found at http://freepdfhosting.com/d500723fb8.pdf.

Failures of the Emergency Rulemaking Process at the IHRC

In “Emergencies Rule” we weren’t able to include another example of the failure of the IHRC’s emergency rulemaking process. One of the agenda items at their January 24th meeting was to introduce a brand new administrative rule regarding drug thresholds levels. Specifically, 71 IAC 8-1-4.2, the standardbred version of this rule, had three distinct versions. The first version of the standardbred rule that was emailed out to horsemen’s associations for comments included thresholds for five different drugs: clenbuterol, firocoxib, glycopyrrolate, methocarbamol, and DMSO. The second version, which was handed out at the commission meeting with a draft date of January 3, 2012, had thresholds for three drugs: clenbuterol, firocoxib, and DMSO. The third version of this rule, the one submitted to the Indiana Register as the Final Rule only listed a threshold for clenbuterol when filed on January 25th.

In reviewing the transcript of the January 24th meeting, the discussion on this emergency rule indicates that the IHRC fully intended to approve the draft rule handed out at the meeting with the three drug thresholds. However, the January 3rd draft presented to the commissioners was not submitted to the Indiana Register as the final rule. Clearly, the filing of the incorrect final rule was some type of clerical error. Indiana law, under IC 4-22-2-38, allows for clerical errors to be corrected which seems pretty simple, but that is not what the IHRC staff did.

The “clenbuterol-only threshold rule” was in effective for 15 days when the IHRC staff filed the January 3rd draft rules to the Indiana Register as a brand new emergency rule, not a correction. While only one emergency rule was approved by the commission, the Indiana Register now indicates that two versions of this emergency rule were approved. This first-time rule is now on the books as having one version from January 25th to February 8th and another version from February 8th and beyond. So, why wasn’t this clerical error just corrected as a mistake?

First, the filing of a correction to a rule as a clerical error would be an admission of a mistake. The IHRC is not known for admitting to their mistakes. If you’ve read “Emergencies Rule” you have a sense for how the emergency rulemaking process at the IHRC avoids oversight from the Attorney General (AG) and the Governor’s office. According to Indiana law, when a correction to an administrative rule is filed by an agency that rule is subject to objections by the attorney general’s office and by the governor’s office during a 45 day period. Filing the corrected version of this rule as another emergency rule puts the rule in effect, without additional oversight, when the rule is filed with the Indiana Register. Clerical corrections to rules don’t go into effect until the end of that 45 day period which would have expired prior to the start of the standardbred racing on March 27th.

Having three different versions of any rule would never happen under the regular rulemaking process. (The comparable rule for the flat racing breeds only had two versions and also had the incorrect version filed as the Final Rule. This clerical error was also “corrected” with another emergency rule.) Through the regular rulemaking process, once a Notice of Intent to Adopt has been filed, the language of the rule cannot be substantively changed. The emergency rulemaking, as demonstrated by the IHRC, leaves the door open to mistakes in submissions and ‘bait and switch’-type tactics with the language within their administrative rules. Their process, for administrative rules that carry the weight of a law, should be done more carefully and with proper legal oversight.

Proper Legal Oversight is a Must

IBOP is supportive of proper legal oversight of the IHRC’s rulemaking which in our view should include the Attorney General’s Office. Here’s another example as to why:

Another administrative rule on the agenda at the January 24th IHRC meeting was an amendment to a rule on purse forfeiture for certain medication violations. The rule was being modified to defer penalties to those recommended by the Association of Racing Commissioners, International (ARCI) for bute, flunixin, ketoprofen and salix overages. No specific penalties are mentioned in the IHRC’s proposed rule with just a reference to “recommended penalties of the Association of Racing Commissioners, International.” (The concept that an Indiana commission of any kind would defer THEIR responsibility to an association with no authority within Indiana is appalling.) Indiana law DOES allow for what is called “incorporation by reference” in administrative rules which allows for a standard adopted by a national association to be included in an Indiana rule. So, the deferral to the ARCI is allowed by law; however, any reference must be “fully and exactly described.” This is where proper legal oversight would need to come into play to answer the question, “which recommended penalties?”

The ARCI doesn’t recommend penalties; they are not a regulatory body. The ARCI recommends model rules for their members to incorporate into their state’s rulebooks. And, since their model rule recommendations change over time, this particular incorporation by reference fails to meet the “fully and exactly described” standard required by Indiana law. For this rule to meet Indiana’s legal standard, it needs to be further described by “Version 5.00 – Revised December 9, 2011.” Indiana law requires any ‘incorporation by reference’ to be fixed to a particular version of what is actually being referenced. (We found similar errors in other IHRC administrative rules.)
The point here is that Indiana law does not allow an administrative agency to continually defer Indiana’s rules to an outside organization’s rules. To do so is bad public policy and the law recognizes this. Yet, this emergency rule, which is now a final rule, attempts to do just that. The lack of proper clarity opens the State up to potential legal issues should anyone be penalized under this rule. With no statutory authority to disapprove an IHRC emergency rule, the AG can do nothing to protect the State of Indiana should that happen.

When should emergency rulemaking be used?

Simply, emergency rules should be used when a true emergency exists. IBOP is not suggesting that there aren’t potentially legitimate emergencies that may require administrative rules to go into effect immediately. Indiana law allows the IHRC to suspend a person’s license immediately and prior to a hearing on the matter. This is called a summary suspension and the criteria in the law for a summary suspension of a license are if the licensee’s actions “constitute an immediate danger to the public health, safety, or welfare.” In their own administrative rules, the IHRC has expanded upon this language to “an immediate danger to the public health, safety, or welfare or compromise the integrity of operations at a track or satellite facility.” In creating this summary suspension administrative rule, the IHRC has actually defined what they believe an emergency to be.

We believe that if a proposed administrative rule doesn’t fit into this definition of emergency, then the IHRC should be required to use the regular rulemaking process. Doing so would insure that proper legal oversight from the AG’s office would be involved. Doing so would insure that all statutory standards for all administrative rules are upheld. (Indiana law says, to the extent possible, all administrative rules “shall” minimize the expenses to those being regulated, to taxpayers, and to those who are the consumers of the regulated product. Another standard is that each administrative rule is supposed to “achieve the regulatory goal in the least restrictive manner.”) Doing so would insure that Indiana horse racing doesn’t create out-of-competition testing rules that are outside of the IHRC’s legal authority and that don’t infringe on an individual’s rights. Doing so would also guarantee that the IHRC never again creates an administrative rule that allows for an interest-free loan of horsemen’s purse money to the race tracks. Indiana horsemen do deserve better.

Administrative Rule of the Month - Taking of Samples

Ownership of property and individual rights are staples of modern capitalism. The founding documents of our country expressly put guarding your life, your property and possessions, and your individual rights into sharp focus. One of the ‘protections’ that IBOP outlined in our first newsletter was the Protection of Owner’s Rights. Unfortunately, we’ve seen how the ‘rights’ of a property owner can be regulated away.

Based upon recent actions of the Indiana Horse Racing Commission (IHRC), ownership of a horse doesn’t carry a lot weight with them. The IHRC's new version of 71 IAC 8.5-2-4 regarding the taking of blood, urine, saliva, or other test samples from a horse makes this very clear. (The standardbred version of this administrative rule is 71 IAC 8-3-4.) If you are the owner of the horse and not the trainer, you may no longer witness the taking of these samples from your own horse. At the January 24, 2012 commission meeting, the IHRC amended a rule without considering the rights of the actual horse owner.

Here is the version of the rule that was in effect before the IHRC decided to “regulate” it:

71 IAC 8.5-2-4 Taking of samples
Authority: IC 4-31-3-9
Affected: IC 4-31-12
Sec. 4. (a) Blood, urine, saliva, or other samples shall be:
(3) witnessed, confirmed, or acknowledged by the trainer of the horse being tested or his or her authorized representative or employee and may be witnessed by the owner, trainer, or other licensed person designated by them;

IBOP Comments: Clearly, this portion of the rule defines who may witness the taking of a sample from a horse for testing with the owner included.

This version of the rule was emailed to horsemen’s associations for comment prior to the IHRC meeting:

71 IAC 8.5-2-4 Taking of samples
Authority: IC 4-31-3-9
Affected: IC 4-31-12
Sec. 4. (a) Blood, urine, saliva, or other samples shall be:
(3) witnessed, confirmed, or acknowledged by the trainer of the horse being tested or his or her authorized representative or employee unless the sample is being taken pursuant to 71 IAC 8.5-7-1 (c) or 71 IAC 8.5-7-1 (d), and may be witnessed by the owner, trainer, or other licensed person designated by them;

IBOP Comments: The IHRC’s intent regarding the regulating of this rule was to eliminate any witnessing of test samples taken in a postmortem exam. The references to 71 IAC 8.5-7-1(c) and (d) are regarding post mortem exams and the taking of samples for testing. The rule states, “The presence of a prohibited substance in a specimen collected during the postmortem examination may constitute a violation.” When this proposed rule was made public, IBOP formally objected. Our position was that if a penalty could be assessed for postmortem drug testing, then “the integrity of those samples should be treated no differently than samples taken from a live horse.”

Plus, 71 IAC 8.5-7-1(d) encourages the taking of testing samples from an injured horse prior to that horse being euthanized. (With the ability to take postmortem testing samples, then why would the IHRC prefer to extend the suffering of an injured horse?) Our position on this entire rule stated that an owner or an owner’s representative should have the right to witness the chain of custody of ANY sample collected for testing ANY time unless specifically waived by the owner or the owner’s representative. Clearly, our plea for recognition of an owner’s right fell on deaf ears.

Below is the version of the rule that was filed with the Indiana Register and is now the rule in effect:

71 IAC 8.5-2-4 Taking of samples
Authority: IC 4-31-3-9
Affected: IC 4-31-12
Sec. 4. (a) Blood, urine, saliva, or other samples shall be:
(3) witnessed, confirmed, or acknowledged by the trainer of the horse being tested or his or her authorized representative or employee unless the sample is being taken pursuant to 71 IAC 8.5-7-1(c) or 71 IAC 8.5-7-1(d);

IBOP Comments: As you can see, the new IHRC-approved rule now excludes any sample being taken prior to euthanizing a horse or during a postmortem from being witnessed by the horse’s connections. You will also notice that the word “owner” no longer exists in the rule. In Indiana, the actual owner of a horse, if different from the trainer, may no longer witness, confirm, or acknowledge the taking of testing samples. Through the course of the commission’s discussion of this rule, they eliminated the phrase, “and may be witnessed by the owner, trainer, or other licensed person designated by them.”

Commissioner Jason Barclay thought that the phrase "and may be witnessed by the owner, trainer, or other licensed person designated by them" was redundant to the first part of the sentence. He is partially correct with the rule repeating the word trainer and referencing another licensed person designated by the owner or trainer. However, his efforts to remove the redundancy completely eliminated the owner from witnessing ANY taking of samples from their horse(s), postmortem or otherwise. The IHRC assumed that an owner MAY be involved, but eliminated an owner’s ability TO be involved. A trainer is an owner’s authorized representative, not the other way around, and Indiana’s commissioners should know this.